It may come as a surprise, but saving money does have it disadvantages in some situations. In this article you will get to know the benefits of saving money but also the disadvantages.
The benefits of Saving Money
If you aren’t as fortunate that you have so much cash that you can do what you want, saving is a really good option. That way, you can afford something (like a new phone) after a few months. Saving for the future is the way to go if you want to do something nice in the future. When buying new stuff or traveling, you are offered to get something now and pay later. Don’t accept any of these offers ever. These offers are evil. It is basically debt, but when you lose your job or your financial situation changes you might not be able to pay for it later on.
When is it better to not save money?
If you have debt (a mortgage or a credit card) it is better to pay of this debt as soon as possible. It doesn’t make any sense to get 4% interest, when debt will cost you 6% (for example). You should pay off this debt, because it saves you a lot of money in the long run. Consider as much overpayments on your mortgage as possible, as soon as possible. It will help you to save hundreds of dollars on the short run. You will save even more on the long run.
The basic saving rule says that you will need 50% of your income. You can spend a maximum of 30% on the things you want in life. The other 20% you can use to save or to pay off any existing debt.